As the United States and China roll out back-to-back restrictions targeting supply chains in key industries, their tech hegemony contest is expanding beyond advanced semiconductors to critical materials and drones. The United States widened its measures to include polysilicon, a core raw material used across both the semiconductor and solar industries, while China tightened export screening for drones bound for the United States and related technologies.
According to Reuters on the 5th (local time), the administration of Donald Trump plans as early as the 6th to issue a proclamation imposing a 15% tariff on polysilicon derivatives and applying minimum import prices to polysilicon, wafers, solar cells, and modules (solar panels).
Polysilicon is a key material for solar panels and a high-purity silicon feedstock used to make semiconductor wafers. The United States is said to be seeking, through this step, to protect domestic polysilicon production facilities and to keep China's expanding influence over the semiconductor supply chain in check. It also follows a national security probe the U.S. Commerce Department has conducted for about a year.
The same day, China also announced steps responding to U.S. technology restrictions on China. China's Ministry of Commerce said it will ban individuals and corporations and institutions from engaging in transactions or cooperation with U.S. corporations and institutions. Seven entities were designated, including Compliance Testing LLC, an American testing and certification company, as well as Applied DNA Sciences, Stratum Reservoir, Altana Technologies, Responsible Business Alliance, Verité Group, and Human Rights in China. China's Ministry of Commerce claimed that Compliance Testing supported China-related measures by the U.S. Federal Communications Commission (FCC). It also determined that the other six supported U.S. sanctions related to Xinjiang Uyghurs.
In particular, China's Ministry of Commerce decided not to apply simplified licensing procedures and to conduct case-by-case reviews for controlled drones exported to the United States, their key components, and related technologies. While not a blanket export ban, the tougher licensing under China's dual-use export control rules could delay supplies of drones bound for the United States and related parts. It also decided to halt factory follow-up inspections conducted by U.S. agencies under China's Compulsory Certification (CCC) system. China's Ministry of Commerce said the move responds to the United States' recent technology restrictions on China.
The United States recently tightened rules on Chinese telecom operators and testing bodies, drones, consumer routers, undersea cables, advanced robotic equipment, and power inverters. On the 29th it added more than 40 Chinese corporations to the Uyghur Forced Labor Prevention Act (UFLPA) sanction list. Separately, the United States is pursuing a plan to restrict imports of new models of optical communication components for China-made AI data centers.
U.S. restrictions on China have until now expanded around advanced semiconductors, AI-related equipment, and telecom gear. With polysilicon, a core material commonly used in the semiconductor and solar industries, added to the scope, the supply chain controls are broadening down to the raw-material stage. As China counters by leveraging areas where it holds an edge—following rare earths, now drones and certification systems—industry watchers say the rivalry between the two countries could expand beyond individual items to the entirety of strategic industry supply chains.